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Rupee ended lower, Pound eases vs. Dollar

Tuesday,   12-Oct-2021   04:02 PM (IST)

The Indian rupee ended the session lower at 75.51/52 levels compared to its opening at 75.41/42 levels after touching the low of 75.67/68 levels dragged down by dollar demand from oil marketing companies amid crude oil prices continuing their upsurge. Rupee had dropped to 75.67 earlier in the session, its lowest since Jun. 29, 2020, but trimmed losses on exporters' dollar sales and dollar position covering by some foreign banks. Rupee traded in the range of 75.16-75.67 levels today. The rupee and most other Asian currencies came under pressure today after the nearest Brent crude rose 0.2% to $83.80 per barrel after having reached a three-year low of $84.60 intraday yesterday. The benchmark contract has surged 6.5% this month, taking its yearly climb to over 60%. Indian federal government bond yields settled largely unchanged after rising for two consecutive days as traders awaited retail inflation data for September. Domestic indices ended a choppy day in the positive territory on Tuesday amid fag-end buying in PSB, FMCG, and auto stocks. The S&P BSE Sensex ended the day at 60,284 levels, up 148.5 points or 0.25 per cent while the Nifty50 index closed at 17,992-mark, up 46 points or 0.26 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.58%, 3.71% and 4.12% respectively.

Sterling eased from a two-week high against the dollar on Tuesday as UK jobs data came in largely in line with forecasts, keeping expectations for future rate rises from the Bank of England intact. The pound hit a two-week high against the greenback on Monday on hawkish comments from BoE governor Andrew Bailey, who stressed the need to prevent inflation, and fellow policymaker Michael Saunders, who said households must brace for “significantly earlier” interest rate rises. The BoE, which is gearing up to become the first major central bank to raise rates since the coronavirus crisis struck, is watching to see how many people became unemployed after the end of the country’s pandemic furlough programme. Data showed British employers expanded their payrolls to a record high in September, while the unemployment rate edged down to 4.5% in the three months to August, in line with economists’ forecasts in a Reuters poll. Money market pricing shows around an 8 basis point rate hike from the BoE priced in as early as the Bank’s November meeting. Sterling traded a touch lower on the day, down 0.06% against the dollar at $1.3586 and below Monday’s peak of $1.3674. Against the euro, it was also slightly lower, down 0.04% at 85.05 pence. Positioning data from the CFTC on Friday showed the biggest weekly trimming of speculative positions in the pound in two years, with a shift from neutral to short positions on the currency. Respondents to an October market sentiment survey from Deutsche Bank said they expected the BoE to make a policy mistake on the hawkish side.